Cigna announced this week it is pulling out of Florida's health insurance exchange effective at the end of the year.
Company spokesperson Joseph Mondy said Cigna has experienced high costs as a result of fraudulent substance abuse claims submitted by treatment centers.
Mondy said Cigna is "discontinuing its participation on the Florida public health insurance marketplace for 2016 because we have experienced an exponential increase in fraudulent and abusive care delivery practices in 2015 in Florida. The problem is particularly concentrated with out-of-network substance abuse clinics and labs."
The pullout affects only individual and family plans purchased on the public health insurance exchange created in conjunction with the Affordable Care Act. Mondy said the company is not pulling out of any other state exchanges.
The decision does not affect Cigna’s Medicare Advantage plans or employer-related plans. The company expects to offer a new selection of plans on the exchange in 2017.
About 30,000 Florida residents have Cigna policies through the exchange, according to a spokesperson for the Florida Office of Insurance Regulation.
Current Cigna health exchange customers will need to enroll with another carrier if they want health insurance in 2016.
Mondy said Cigna has begun letting its exchange customers know about their options prior to the Nov. 1 start of open enrollment. All Cigna plans purchased through the exchange will expire on Dec. 31 if people don't choose a new provider.
“Cigna assessed its current Florida Marketplace product offerings and determined that 2016 plans could not be offered at affordable levels to customers,” said Mondy. “As a result, Cigna is working to revamp its Florida product offerings and will return to the Florida Marketplace in 2017 with offerings that will ensure high quality, affordability, and sustainability for customers.”
Cigna has not publicly named specific substance abuse clinics and labs affecting the company's costs but said there is evidence of excessive drug testing of addicts by some addiction treatment centers in Palm Beach County, which then bill insurance companies for the tests.
Earlier this month, though, Cigna sued Sky Toxicology and two associated lab firms in federal court in Palm Beach County, citing $20 million in testing-related fraud, according to newspaper reports.
